United Kingdom VAT & Duties Tribunals (Excise) Decisions

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URL: http://www.bailii.org/uk/cases/UKVAT/Excise/2005/E00926.html
Cite as: [2005] UKVAT(Excise) E00926, [2005] UKVAT(Excise) E926

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Crocker v Revenue and Customs [2005] UKVAT(Excise) E00926 (10 November 2005)

EO0926

EXCISE DUTY — restoration of vehicle — vehicle used by owner's husband without her knowledge — reasonableness of the decision to offer conditional restoration — decision unreasonable — further review ordered — appeal allowed

MANCHESTER TRIBUNAL CENTRE

PAMELA CROCKER Appellant

- and -

THE COMMISSIONERS FOR

HER MAJESTY'S REVENUE AND CUSTOMS Respondents

Tribunal: Lady Mitting (Chairman)

Mohammed Farooq

Sitting in public in Birmingham on 18 October 2005

Grant Williams for the Appellant

Ben Mills, counsel, instructed by the Acting Solicitor for HM Revenue and Customs for the Respondents

© CROWN COPYRIGHT 2005


 


DECISION

1. Mrs Pamela Crocker appeals against the decision of the Commissioners, taken on review and notified to her by letter dated 1 March 2004 to offer only conditional restoration of her Ford Mondeo motor car L680 YGB seized at Dover Eastern Docks on 5 May 2001.

Background to the Appeal

2. On 5 May 2001, Mrs Crocker's motor vehicle was intercepted at Dover Eastern Docks. Travelling in the vehicle were Mrs Crocker's husband, Graham Crocker and Stephen Evans. They were found to be carrying the following excise goods upon which duty had not been paid:

25 kg hand rolling tobacco

5 kg pipe tobacco

3,200 cigarettes

100 cigarillos

1 litre of spirits

3. After interview, the officers took the view that the goods were being imported for commercial use and both the vehicle and goods were seized.
4. Mr and Mrs Crocker and Mr Evans all wrote to the Respondents by letters dated 8 May 2001, the Respondents treating the letters as requests for restoration. By letter dated 14 June 2001, restoration was refused and a review of that refusal was requested. The review was not carried out within the 45 day time limit and in consequence, the original decision to refuse restoration was deemed to have been upheld on 31 August 2001.
5. Mr Crocker and Mr Evans appealed against the decision by notice of appeal dated 28 September 2001 and Mrs Crocker appealed on 25 March 2002. On 24 November 2003, the Respondents served an application for the disputed decisions to be further reviewed in the light of further case law and policy changes. A further review was directed by the Tribunal, the review being carried out by Mrs Debbie Gillespie. Mrs Gillespie took the view that Mr Evans and Mr Crocker had purchased the excise goods for distribution to family and friends at cost and she therefore refused restoration of the goods but offered restoration of the vehicle conditional upon payment of the duty. The vehicle had, however, already been disposed of and Mrs Crocker was therefore offered £306, the sum being the Respondents' valuation of £2,775 less 100 per cent of the excise duty (£2,469).
6. All three appealed against this decision and the case originally came up for hearing before the Tribunal on 16 August 2004. At that hearing, Mr Crocker and Mr Evans alleged that the Customs officers had lied and made false statements and the appeal was therefore adjourned so that the interviewing officers' statements could be served on the Appellants and the interviewing officers could also attend. The case next came up on 5 January 2005. Unfortunately, unknown to the Tribunal, the Appellants had not received the hearing notices and the case was heard in their absence and the appeal dismissed. This decision was then set aside and all three appeals came up before us on 18 October 2005. We were told at the outset by Mr Williams that Mr Evans and Mr Crocker were withdrawing their appeals and we are therefore only now concerned with the appeal of Mrs Crocker in relation to the refusal to offer unconditional restoration of her vehicle.
7. On behalf of the Respondents, we heard oral evidence from Mrs Gillespie and on behalf of Mrs Crocker, she gave oral evidence as did Mr Evans and Mr Crocker.

The Respondents' case

8. When Mrs Gillespie came to carry out her review, she had the full seizure file in front of her and the correspondence from Mr and Mrs Crocker and Mr Evans. The only reference to the vehicle in the interviews was when Mr Crocker informed the officer that the vehicle belonged to his wife. In the correspondence, the only reference to the vehicle is in Mrs Crocker's letter dated 8 May 2001 when she wrote in the following terms:

"I am writing with reference to the seizure of vehicle L680 YGB, black Ford Mondeo, on the 5^th May 2001. After making enquiries at the relevant customs offices I was advised that as the car is my property and registered in my name that I should ask for a "Third Party Restoration".

This vehicle was being driven by my husband at the time, I did not know he intended to use the car to go abroad. I was led to believe that he was using Mr M. Evans and thought that I would not mind him using mine, but I did. This car is solely for personal usage (mainly to take my children to and from school) with myself the main driver."

9. Mrs Gillespie considered the position of the vehicle against the background of her view that the goods had been brought in for social distribution at cost. She set out in her letter the Respondents' policy regarding private vehicles used for the improper importation of excise goods. The general rule is that they will not be offered for restoration but, at the discretion of the Commissioners, may be offered for restoration or restoration on terms where the excise goods were destined for supply on a "not for profit" basis or "where the vehicle was owned by a third party owner who was not present at the time of seizure of the vehicle, and was either blameless or had taken reasonable steps to prevent smuggling in their vehicle".
10. Mrs Gillespie dealt with the vehicle in her letter in the following paragraphs:

"Turning now to the restoration of the vehicle. Whilst it is accepted the Mrs Crocker did not travel with Mr Crocker and Mr Evans, I find it hard to accept the claim that she was unaware that the car was to be used to go abroad. To restore the car to Mrs Crocker would be tantamount to restoring it to the person who committed the offence therefore I decline to offer restoration of the vehicle to Mrs Crocker as a genuine third party owner.

The Commissioners' policy for private vehicles dated 18^th April 2002 provides that vehicles will be considered for restoration where the traveller can demonstrate that the excise goods were to be supplied at purchase price and not for profit. My view is that the goods were intended for family at cost price therefore I exercise my option to vary the decision to offer restoration of the vehicle for a fee equivalent to the excise duty on the goods, being £2469.37."

11. In her oral evidence, Mrs Gillespie told us that in the case of a married couple, any vehicle owned by one of the spouses is treated as a jointly owned family asset, regardless of which of the spouses holds the registration. Mrs Crocker was not therefore to be treated as a genuine third party owner. Examples of a third party owner were given as someone who had reported the theft to the Police, or a garage loaning a courtesy car, or if the couple were divorced.
12. Mrs Gillespie was asked in cross examination how she had formed the view that Mrs Crocker was not "unaware that the car was to be used to go abroad". The reasons given by Mrs Gillespie were first that Mrs Crocker had not specifically written that the vehicle had been taken without her permission. Secondly, Mr Crocker had said that some of the goods were for her and she therefore concluded that Mrs Crocker must have been part of the venture. Third, they were a married couple and he was driving the family car. Mr Farooq went on to ask Mrs Gillespie what Mrs Crocker could have done to convince her (Mrs Gillespie) that the vehicle should be restored unconditionally. To this, Mrs Gillespie responded that it could only happen if they were not a married couple or if he had taken the vehicle without permission.

The Appellant's case

13. Mr Evans told us that the original plan was that he and his brother and Mr Crocker were all to travel. Mr Crocker was going to drive round to Mr Evans, who lived a few miles away, in his vehicle which he would then leave in Mr Evans' drive and the three of them would travel on in the brother's vehicle. However, at the very last minute, Mr Evans' brother telephoned to say that he could not come because of family illness. This was so much at the last minute that he was not able to let Mr Crocker know in advance and when Mr Crocker arrived at Mr Evans' they decided to go in any event but using the Crockers' vehicle. Mr Evans confirmed that at no time in his presence did Mr Crocker inform his wife that her car was to be used. Mr Crocker confirmed that he arrived at Mr Evans' shortly before midnight, expecting to travel in the brother's vehicle but when he was told that the brother was not going to be able to come, on the spur of the moment, he said that they could use his vehicle. He did not tell Mr Evans that the vehicle in fact belonged to Mrs Crocker and not to him and he did not tell his wife because it would have been too late and she would have been asleep. At no time, therefore, did Mrs Crocker know that their plans had changed and that her car was to be used. He did not believe that his wife would have allowed him to use her vehicle had she been asked. He confirmed that the car was used very much as a family vehicle. It was used by both of them as and when either of them needed it and provided Mrs Crocker was not using it for herself or the children, Mr Crocker would use it without feeling any necessity to ask permission to do so. The main driver was certainly Mrs Crocker because she had responsibility for the children and priority for use would always be given to whatever the children's needs were for their various activities.
14. Mrs Crocker told us that she had known of the planned trip a week or so before it took place and she knew that they were due to travel in Mr Evans' brother's vehicle. She knew that her husband was driving her vehicle to Mr Evans' and leaving it in his drive and she had arranged to go over later in the day to pick it up. Had she known that her vehicle was to be used for the entire trip, she would not have allowed it because she in fact needed it that day for herself and the children. She could not remember when or how she had learned that her car had been taken but she thinks it would have been when she phoned Mrs Evans during the morning to arrange to go and collect it.
15. We established from Mrs Crocker that she had owned the vehicle since 8 February 1999. It was registered in her name and she had paid for it by way of a bank loan. The repayments were met out of her own personal bank account which was fed from her income, her husband's income being paid into a separate jointly held bank account.
16. When the vehicle was seized and not restored, she had had to purchase another one, again in her own name and again taking out a bank loan, paying the instalments out of her own personal account.

Submissions

17. Mr Mills submitted that it was perfectly reasonable for Mrs Gillespie to have formed the view that Mrs Crocker knew of the trip and that it was equally reasonable for her to refuse unconditional restoration given that the vehicle was a shared family vehicle. It was Mr Mills' contention that where a car is shared by insured drivers, the actual registered owner cannot be treated as a genuine third party owner. Only if Mrs Crocker had sole and absolute control over the vehicle would it have been unreasonable to refuse her restoration. For as long as Mr Crocker had some rights over it, it was wrong to treat the vehicle as belonging to Mrs Crocker and to return it to her would in effect be to return it to the wrongdoer.
18. Mr Williams contended that his client had not given permission for the vehicle to be used. She was not asked if it could be used and was not aware that it was to be. Both Mr and Mrs Crocker treated the vehicle as belonging to Mrs Crocker even though they both used it. To refuse her unconditional restoration was unreasonable and given that she had had to purchase a replacement car it had also caused her considerable hardship.
19. Neither party sought to rely on any authorities and we asked both representatives if they could research the position over third party ownership as between husband and wife and let us have, within three days, any authorities which they were able to find. Neither representative submitted any authorities and we therefore assume that neither could find any and we take account of no authorities in reaching our decision.

The Tribunal's Jurisdiction

20. As we explained to Mrs Crocker, our jurisdiction is limited by statute. We cannot order the restoration of her vehicle or indeed alter the terms upon which restoration has been offered. We are permitted only to consider the reasonableness of Mrs Gillespie's decision. In so doing, we consider whether there were any facts which she omitted to take into account or anything which she considered which she should not have done; whether she gave excessive weight or insufficient weight to any particular matter or whether she made any error in law. If we find her decision to have been unreasonable, we are then limited to directing that a further review should be carried out although we would expect any such review to take into account any findings which we as a Tribunal make.

Conclusions

21. Mrs Gillespie refused to offer unconditional restoration of the vehicle because, first, she believed that Mrs Crocker did know her vehicle was to be used and secondly, she was not a "genuine third party owner" such as would fall within the policy for unconditional restoration.
22. We consider first therefore Mrs Crocker's knowledge. We have had the benefit of hearing Mrs Crocker. We acknowledge Mr Mills' criticism of certain aspects of Mrs Crocker's evidence, for example, her vagueness as to when she first heard that her vehicle had gone. However, it equally has to be acknowledged that, through no fault of her own, it is now four and a half years since the seizure. It is no fault of Mrs Crocker's that she is being asked to recall these events so long after the day and it really is hardly surprising that she cannot remember everything that happened with total clarity. Her evidence has never wavered, from her initial letter to the giving of her evidence to us. She has at all times said that she did not know her vehicle was to be used; that she believed it was Mr Evans' brother's vehicle that they were going in and that she would not have consented to hers being used. This is evidence which we accept. She has never tried to deny her knowledge of the trip, merely the means by which it was to be made. We accept her evidence that she needed the vehicle for herself and the children that day and, even if asked, would not therefore have let her husband use it. There was no evidence to the contrary. On the basis of what we have heard, we make the following findings of fact. The vehicle was registered in Mrs Crocker's name and finance for its purchase was provided solely by her. In every sense of the word, she therefore owned the vehicle. Next, she has always acknowledged, and we find as a fact, that she knew her husband intended to travel to Belgium with Mr Evans and Mr Evans' brother. She was, however, never told that her vehicle was to be used. She was never asked if it could be used and had no idea that it was to be used. If she had been asked, she would have refused. In summary, we find Mrs Crocker, although she had knowledge of the trip, to have been unaware of the use of her vehicle.
23. Mrs Gillespie formed a different view but her view was, we believe, formed on remarkably scanty information. Mrs Gillespie gave to the Tribunal as one of her reasons that Mrs Crocker had not in her letter specifically said that the vehicle had been taken without her permission. True, Mrs Crocker did not use this precise form of words but it is clearly implicit in her letter that the vehicle was taken without her permission because she said she did not know that her husband intended to use it and that had she known, she would not have allowed it (we take this from her phrase that he thought she would not mind but she did). The next two reasons given by Mrs Gillespie do not, in our view, address the issue of her knowledge of the use of the vehicle at all. She points out that Mr Crocker brought back some goods for his wife. Mrs Crocker has never denied that she knew of the purpose of the trip but the mere fact that he was bringing something back for her, and indeed there was no evidence that Mrs Crocker even knew this, does not mean and cannot be taken to imply that she knew her vehicle was to be used. Equally, the fact that they were a married couple and he was driving the family car cannot be taken as any form of evidence that she knew that he was going to use it. We believe it was unreasonable of Mrs Gillespie, given the very limited information which she had and on the basis of the reasons which she has given, to conclude that Mrs Crocker was aware and consented to the use of her vehicle.
24. Next, Mrs Gillespie goes on to say that in any event, Mrs Crocker could not be treated as a genuine third party owner because she and her husband were a married couple. We acknowledge that the Respondents do not want vehicles returned to "wrongdoers". This is a perfectly reasonable aim for the Commissioners to have. Equally, we appreciate that in the case of a husband and wife, to return the vehicle to the spouse who owned it means, almost inevitably, that the remaining spouse will regain access to it. This in fact is presumably the case not only with husbands and wives but in a number of forms of relationship where people living in one household and share a vehicle. All policies however must bend to the facts and be capable of being enforced with sufficient flexibility to take account of the facts of each case. On the facts as we have found them here, Mrs Crocker, whilst knowing of the venture, was utterly unaware and would not have agreed to the use of her vehicle. And yet the situation which we have, because the Respondents have disposed of the vehicle, is that Mrs Crocker has lost an asset worth £2775 and received just £306 in lieu. Surely it cannot be right that she should be penalised merely because to give her her vehicle back unconditionally would have a side effect of allowing her husband to regain access to it. If this is the view which Mrs Gillespie took, then we consider this to have been unreasonable. In fact, however, we do wonder whether this really does represent Mrs Gillespie's views, given her answer to Mr Farooq (paragraph 12). Mrs Gillespie clearly replied that she could have been persuaded if they were not a married couple or if the vehicle had been taken without permission. The clear implication here is that if Mrs Gillespie had believed Mrs Crocker to have been unaware of the use of her vehicle, she would have restored it unconditionally despite their being husband and wife. As we have already found her conclusion as to Mrs Crocker's awareness was unreasonably reached.
25. For all these reasons, we find that the decision to offer only conditional restoration of the vehicle to Mrs Crocker was unreasonable and in line with our jurisdiction, we direct that a further review be carried out. We direct that such a review be undertaken within six weeks of the date of release of this decision by an officer who has had no previous involvement with the case.
26. The appeal is allowed. There was no application for costs and we make no order.

LADY MITTING

CHAIRMAN
Release Date: 10 November 2005

MAN/04/8038